The good news is you won a new account. The bad news is you discovered they can’t pay your invoice. Either the economy had taken it’s toll on their cash flow, and now you are somewhere on the back burner of overdue bills, or the economy has taken it’s toll and they are now out of business or bankrupt and restructuring. Either way, you will have a tough time collecting.
Major case in point is General Motors. They are bankrupt and restructuring. Vendor accounts will not be paid. As reported in Media Daily News and a dozen other places, General Motors’ advertising and marketing agencies are owed more than $160 Million. That’s a tough hit to take for any company or group of companies.
I know of another marketing group than spent more than $300 Thousand just bidding for the account of one of our nation’s leading banks. That is, formerly one of our nation’s leading banks. Again, the good news was the marketing group one the account. They ramped up staff, made, strategized, and were all set to go. That bank went out of business. The marketing group was left holding the bag. They had to lay off employees who had just been hired. And others as well.
That is why in today’s grim economy it is so important to conduct business research on your prospective clients. While it is great they have selected you for thier goods or services, you must ask yourself…why? They may have burned bridges and are now coming to you because you are the last harbor of refuge. They may be a slippery company that retains vendors and then discards them like so much Kleenix. Or they may be in fine shape when they first engage, and then find they are running short of income and incapable of paying you.
When you run business credit reports it is not enough to retrieve database searches. Database searches are old news. It always pays to spend the few extra bucks and run fresh business credit reports. Detailed reports that will answer most of your questions. Based on the business credit report you can then conduct background checks on the company and its principal owners. Federal Civil Background Searches are highly recommended as the courts fill with various law suits.
Check them out before you do business. The few bucks you spend up front can save a bundle on the back end.
